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High interest borrowings and 14 tax concessions that robbed country of revenue culminated in economic crisis

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General Secretary of the Communist Party Dr. G. Weerasinghe and researcher Shiran Illanperuma with the policy programme.

–     CP General Secretary

By Rathindra Kuruwita

Sri Lankan governments, since 1977, had given 14 tax concessions during 42 years, and they had led to a decrease in state revenue and culminated in the 2022 economic crisis, Dr. G. Weerasinghe, General Secretary of the Communist Party of Sri Lanka (CPSL) said in Maharagama on MOnday.

Speaking at an event to mark the 80th anniversary of the CPSL and the launch of their manifesto, Idirimagin Idiriyata, Dr. Weerasinghe said that the state had lost non-tax revenue due to the privatisation of public ventures in the 1980s and 1990s.

“Almost all governments, since 1977, have followed policies that were inimical to the agriculture and manufacturing sectors. We moved to low paying and low-productivity service jobs. It is a well-known fact that all nations that joined the developed nations club in the last 60 years focused on labour intensive manufacturing and boosting agricultural productivity. This is the history of development, but we have decided to ignore it since 1977,” he said.

Dr. Weerasinghe said that the institutions set up to ensure adherence to the Washington Consensus, i.e. World Bank and the IMF dictates, had encouraged deindustrialization in Sri Lanka.

“In fact, a 2003 agreement we signed with the IMF says that the Sri Lankan government will not take steps to develop industrialization,” he said.

The CPSL General Secretary said that as the state had lost both tax and non-tax revenue, it was compelled to borrow, especially from the International Sovereign Bond (ISB) markets.

“We started borrowing from these markets in 2007. Up until 2015, we borrowed about 30 percent of our total debt from ISBs. Between 2015 and 2019, we borrowed over 13 billion US dollars from these markets. These bonds are held by companies based in the US and the EU. They are literally poli mudalalis (loan sharks). Borrowing from these markets has ruined us. However, there is a big campaign by the west and its local allies to place the blame on China,” he said.

The new CPSL manifesto presented an alternative model for development based on science and industrialisation, Dr. Weerasinghe said.



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Chemmani mass graves: Govt to seek international forensic help

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ECONOMYNEXT –International assistance for forensic analysis of the remains unearthed at the Chemmani mass grave will be sought when the need arises, Sri Lanka’s Minister of has Justice said after opposition legislators urged the government to seek help.

“We have spoken to embassies, we have made all the local finances necessary for excavation. But when it comes to DNA analysis, depending on the type and nature we will definitely have to go for internationally recognised places,” Harshana Nanayakkara said in response to a query in Parliament.

Nanayakkara said that request for international expertise is dependant on the direction the courts give on what needs to be done, after which they will decide which agency best suits the proceedings.

The minister also recognised that local expertise is lacking in the forensic department, and the need to train local staff with the help of international experts.

Opposition MPs argued that the present need is direct help in forensics from international entities, rather than the longer term need to train the staff on analysis.

Currently, the investigation is in the excavation and exhumation stage, conducted by archaeologist Raj Somadeva and his team.

The existence of the Chemmani mass grave was first brought to light in 1998, during the trial of the rape and murder of schoolgirl Krishanti Kumaraswamy.

In February 2025, construction workers found remains near the Sinthupathy Cemetery, and following investigations ordered by the Learned Magistrate, the mass grave was discovered.

412 bodies have been discovered, with 409 bodies recovered as of 23 June 2026. According to the Office on Missing Persons, this is the 17th recorded mass grave in Sri Lanka.

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ADB approves $57.4 million package to boost Lanka’s rooftop solar drive

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The Asian Development Bank (ADB) has approved a $57.4 million financing package to help Sri Lanka expand access to affordable clean energy and reduce greenhouse gas emissions through a large-scale rooftop solar aggregation and virtual net metering programme.

The financing comprises a $35 million concessional loan, $16.9 million in grants from the European Union and $5.5 million from the Japan Fund for the Joint Crediting Mechanism. With additional contributions from implementing agencies, the total estimated cost of the project is $80.5 million.

Under the Rooftop Solar Aggregation and Virtual Net Metering Project, two state-owned utilities — Electricity Distribution Lanka (Private) Limited and Lanka Electricity Company (Private) Limited — will introduce a scalable model to collect electricity generated from large rooftop solar installations and allocate the benefits virtually among eligible consumers.

The initiative will allow consumers to access solar power benefits without having to install individual rooftop solar systems.

ADB Country Director for Sri Lanka Shannon Cowlin said the project would broaden access to affordable renewable energy while strengthening the resilience and inclusiveness of the country’s power sector.

She said the initiative would also support grid modernisation and digital transformation, while creating employment opportunities and encouraging greater participation of women and youth in the clean energy sector.

The project is expected to benefit micro, small and medium enterprises and community organisations that face financial or space constraints in installing their own rooftop solar systems. Through a social compensation mechanism, eligible groups will receive reductions in electricity costs under the virtual net metering system.

The programme will support around 25 megawatt-peak of rooftop solar capacity while strengthening distribution networks, improving digital capabilities and preparing the national grid to accommodate higher levels of distributed renewable energy.

A dedicated training facility will also be established under the project to develop green skills, enhance women’s participation in the sector and build technical expertise in advanced low-carbon technologies.

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Bond scam case against Mahendran, Ravi K fixed for July 22

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The Colombo High Court on Friday ordered that proceedings in the case filed against 11 defendants, including former Central Bank Governor Arjuna Mahendran and former Finance Minister Ravi Karunanayake, over alleged irregularities in the Central Bank bond auction be taken up again on July 22.

The case was called before Colombo High Court Judge Manjula Thilakaratne, who informed court that the Trial-at-Bar bench appointed to hear the matter had not been properly constituted.

Accordingly, the judge directed that the case be recalled on July 22 for further proceedings.

The Attorney General has filed indictments under the Public Property Act against 11 accused, including Mahendran, Karunanayake, Perpetual Treasuries Limited and its directors Arjun Aloysius and Geoffrey Aloysius.

The accused have been charged over alleged irregularities connected to a Treasury bond auction conducted by the Central Bank in March 2016.

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